Prices at the gas pump will likely continue to drop until the end of the year as the demand for gasoline and the price of crude oil go down, say analysts.

And looking ahead to 2014, prices could be kept in check by rising oil production and weak demand in the U.S. and abroad.

Jason Toews, co-founder of GasBuddy.com, said he expects the national average to drop from the current $1.21 per litre to between $1.15 and $1.17 by the end of the year, mirroring a similar slight decrease in pump prices south of the border.

The current average in Toronto is $1.25 per litre, making it the city with the fifth highest average price for gas, with Quebec City being the highest at $1.35 per litre, and Edmonton the lowest at $1.

One of the main factors behind the national drop is the cheaper cost of crude oil. The price of West Texas Intermediate crude oil, typically used as a benchmark in oil pricing, has consistently decreased since August. It is down to $93 a barrel compared to approximately $110 in the summer, said Toews, who added that Canadians have yet to see the full effect of the drop in crude oil prices at the pumps.

“It’s also due to the time of year,” he said. “There’s less demand for gas because the days are shorter and people just don’t drive as much,” he said. “The price is very much tied to the laws of supply and demand.”

The decrease follows a trend that began this past August, when prices slowly began to fall from the national average of $1.33. By late September, it was already close to $1.23.

Still, Canadians continue to pay more than American. If the average U.S. price of $3.20 a gallon is converted to litres, the would currently be about 85 cents U.S., or about 89 Canadian cents. He said the price difference primarily comes down to the fact that Canadians pay more tax.

An oil advisor at Ontario’s Energy Ministry, which does not prepare pricing forecasts, said it’s “uncertain” whether or not the retail price of gas will go up or down by the end of the year.

“The question is: Has the seasonal decline fully played out?” said Spencer Knipping.

He said during the fall, refineries perform seasonal maintenance programs, changing their product mix to produce relatively more heating oil.

The U.S. Energy Information Administration reported last week that U.S. crude oil production hit a 24-year high in October and exceeded imports for the first time since February 1995.

With files from Star wire services

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